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Proposed Airbnb Restrictions Could Be Hamstrung By State Law

Simon Law
/
https://www.flickr.com/photos/sfllaw/

A Tippecanoe County law would drastically restrict the number of days county residents could rent their homes out to visitors on websites such as Airbnb. But the law could be hamstrung by a bill making its way through the state legislature.

The Area Plan Commission’s amendment to the county’s Unified Zoning Ordinance would limit so-called transient rentals to no more than 14 consecutive days, and to no more than 60 days per calendar year. Rental houses that a person owns but doesn’t live in could only be rented for 30 consecutive days and must be in commercial or multi-family residential areas.

The Plan Commission tabled the bill at a January 18 meeting.

Plan Commission Executive Director Sallie Fahey says concerns about short-term rentals came to light after investors bought a small number of houses in one neighborhood to use explicitly as Airbnb rentals.

“The concerns, generally, are that single family homeowners buy into a neighborhood where they don’t necessarily expect that there would be strangers coming and going,” says Fahey.

Fahey says beyond 30 days, a house or room can be leased using traditional month-to-month rental agreements.

“So by sort of mixing and matching options, you could potentially have the room rented all the time,” she says.

Visit Lafayette-West Lafayette President Jo Wade says the area has a smaller number of short-term rental options than other nearby cities. She says area hotels haven’t seemed worried about competition, but rather regulatory fairness.

“The hotels are more upset about Airbnb simply because they aren’t complying with all the regulations that [hotels] are supposed to comply with,” she says, “and that very few of them are paying sales or innkeeper’s tax on those rooms.”

Such regulations are missing from the local amendment, as the state legislature controls who pays innkeeper’s taxes. A law that requires short-term rentals to pay sales tax passed last year.

Wade says she doesn’t expect Airbnb to overtake hotels in the area anytime soon in the same way that she thinks ride-sharing services Uber and Lyft pose a threat to taxi companies.

“You’re not going to drive away any of these shared economies kind of businesses,” she says. “We need to look at proper regulations.”

However, Wade says she’s unsure if imposing a rental limit on properties is the correct kind of regulation the city needs.

In aletter to the Journal & Courier, West Lafayette Mayor John Dennis said he would opt out of the amendment since he views the city's current rental inspection rules as sufficient. "It is the opinion of our legal counsel that our current laws adequately address short-term rentals," he writes. 

The local ordinance could hit a snag if a house bill prohibiting local governments from prohibiting or regulating short-term rentals passes. The bill, which caps rentals at 180 days per calendar year, passed out of committee earlier this month.

The commission is expected to take up the issue at an APC ordinance committee meeting on Wednesday. 

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